Rami Baitiéh has hailed Morrisons’ “good progress” as sales rose during a challenging second quarter for the business.
Group like-for-like sales were up 2.2%, with total sales up 1.7% to £4bn in the 13 weeks to 26 April. It was Morrisons’ 14th consecutive period of like-for-like sales growth, Baitiéh said. However, the rate of growth was slower compared to 2.8% during the first quarter of the year amid “a highly competitive” market.
Sales had been boosted by key seasonal events like Mother’s Day, Valentine’s Day and Easter, helped by Morrisons’ vertically integrated model.
Morrisons had also made further progress with the expansion of its online delivery network, with its recently launched Morrisons Now on-demand channel delivering “double-digit” growth.
Its More Card saw “record redemption rates” following improvements to the level of personalised offers and a step up in the number of physical coupons. It helped membership grow to eight million.
Overall it meant that underlying EBITDA for the half year was up by 5.7% to £323m.
“We continued to make good progress against our priorities in Q2,” Baitiéh said. “In a highly competitive market, we’re focusing hard on delivering the best value for customers to give them more reasons to shop at Morrisons.
“Against the challenging backdrop, I’m pleased with the performance we have delivered in Q2: a 14th consecutive quarter of like-for-like sales growth; underlying EBITDA up, strong improvements in customer experience in our supermarkets, cafés and online with significant increases in net promoter score; good further progress with our cost saving programme and market share on an improving trend,” he added.
Job cuts and closures help Morrisons reduce costs
It tops off what has been a difficult half-year for Morrisons following multiple rounds of job cuts at head office as well as within its convenience team as part of Baitiéh’s £1bn cost-cutting plan.
The supermarket also confirmed the closure of its Rathbones bakery in Wakefield in January, with the loss of 115 jobs. Overall, Morrisons cut costs by £48m during the quarter.
Morrisons also made progress on its convenience expansion plan, opening 30 new Morrisons Daily franchises during the quarter. It took total openings up to 52 during the first half of the year, with plans for “hundreds” more in the years ahead.
In May, Morrisons announced it would close 100 of its company-owned Morrisons Daily stores, affecting hundreds of jobs, as it shifted its focus towards franchise operators.
Looking ahead, trade conditions remained “highly competitive,” Baitiéh said.
“We have made an encouraging start to the third quarter and have strong plans in place to make the most of the World Cup and Father’s Day.
“While more recent international news creates some grounds for optimism, we continue to monitor the impact of input inflation very closely and we remain committed to doing whatever we can to help keep prices down for customers,” he added.
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